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Unconditional cash transfers, risk attitudes and modern inputs demand

Ervin Prifti (), Silvio Daidone (), Noemi Pace () and Benjamin Davis ()
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Ervin Prifti: Food and Agriculture Organization of the United Nations, Rome, Italy
Benjamin Davis: Food and Agriculture Organization of the United Nations, Rome, Italy

Applied Econometrics, 2019, vol. 53, 100-118

Abstract: We estimate the effects of cash transfers on modern inputs demand, while isolating the role of output risk and risk preferences in channeling these effects. We use data from an RCT collected for the evaluation of Zambia’s Social Cash Transfer. We employ a moments-based method to estimate farmers’ risk attitudes from revealed preferences through production decisions and the impact of cash transfers on modern input demand. We find that the program increases demand for risk-increasing modern inputs but this does not happen as a result of a transfer-induced reduction in farmers’ risk aversion.

Keywords: cash transfers; risk attitudes; output risk; input demand; SEM; 3SLS (search for similar items in EconPapers)
JEL-codes: C21 D81 Q12 (search for similar items in EconPapers)
Date: 2019
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